TOKYO, Dec 19 (Reuters) - Japan's 10-year government bond yield rose on Tuesday as market participants focussed on the Bank of Japan (BOJ) to see if it signals an exit from its ultra-easy monetary policy.
The 10-year JGB yield rose as high as 0.685% and was last seen at 0.680%, up 1.5 basis points (bps) from the previous session.
The BOJ will conclude its two-day policy meeting later in the day at which members likely debated whether economic conditions are falling into place for the bank to begin unwinding its ultra-loose monetary settings.
Market players expect the BOJ to maintain its negative interest rate policy unchanged at this meeting, but many say such an action is imminent.
"Investors have braced for some changes from previous meetings," said Takeshi Ishida, a strategist at Resona Holdings.
"Such changes include a tweak in the BOJ's forward guidance, where it currently pledges measures to defend its easy monetary policy without hesitation."
The BOJ has conducted aggressive bond buying to contain rising yields as it defends its ultra-low rate policy, which has hurt market conditions and distorted the yield curve.
But with inflation exceeding its 2% target for well over a year, the BOJ has been laying the groundwork to phase out its massive stimulus such as by relaxing its grip on bond yields.
The two-year JGB yield was flat at 0.075%.
Bonds with other maturities have not traded yet.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu)
